Who Wins The Apple – Google War?

Steve Jobs Eric Schmidt

If an official declaration of war was necessary, it was presented this week at the Google I/O conference. Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) are at war and all of the afternoon coffee breaks between Steve and Eric aren’t going to change that. As the technology world moves from the desktop to the mobile world, the long truce that held between these two rivals dissolved as Microsoft moved to a place of importance but relative irrelevance. So now that the guns are blazing in round two of the Battle of Silicon Valley, who will eventually win the conflict? Will it be Apple with their superior user experience, vertically integrated products, and developed ecosystem? Will it be Google with its clout, emergent systems, and open standards? In fact, neither will be the winner or the loser. The real winner will be you and I, the consumers that use the products and services of both companies.

It is a generally accepted axiom of commercial and economic theory that competition breeds innovation. It is, in fact, the central underpinning of the free market system. When the iPhone and associated operating system came on the scene in 2007 it had no competitor, it had no comparison. It was utterly and truly a new thing, formed entirely to bring a new experience to the cell phone. There was WAP web browsing before the iPhone, there were even limited Java-based applications. The iPhone was born from the realization that consumers would be interested in using a true smart phone as a mini-computer instead of just a phone and limited entertainment device. Apple took that initial lead they grabbed by going in another direction and parlayed it into an environment they slowly iterated to add new features as they became comfortable with them. By the time the iPhone 3G came out in 2008 Apple was firmly astride the mobile market with a dominance and lead no one could question.

But a funny thing happened on the way to world domination, Google showed up. When the Android operating system was announced in 2007 it signaled a move by Google into the mobile space. Google wanted a share of the emergent market Apple had discovered with the iPhone they had announced earlier that year. At the time Android presented little threat to the iPhone OS. It was seen as a configuration heavy, geek friendly operating system while the iPhone OS was geared towards a managed, consumer friendly experience. Between 2007 and 2009 the iPhone OS grabbed a large share of the smart phone market, partially due to its innovative design and partially due to the lack of a viable alternative. When the Motorola Droid was launched in October of 2009 with Android OS 2.0, serious competition for the iPhone finally landed. In the interceding time since then, the innovation and competition coming out of both companies has heated up.

I don’t think it comes as any surprise that I am generally a fan of the iPhone, the iPhone OS, and the whole ecosystem Apple has grown around it. It’s my opinion that it presents the best integrated user experience. I would be the first one to admit however that with the inception of Android 2.0 Google has started to right the ship. As a consumer in the iPhone ecosystem I don’t view this as necessarily a bad thing and neither should you. Good competition breeds innovation and innovation ultimately benefits the consumer. While I wouldn’t advise Apple to start rushing features and services into their products merely to participate in a “me-too” race with Google, I might suggest that taking the competition into consideration might be a good idea. I think they’ve done that already with the inclusion of video conferencing, a front facing camera, and multitasking to the upcoming iPhone 4G / HD. In evaluating the competition and consumer demand, Apple has added features to the product they are comfortable with and that advance the product that much more. Competition spurred the innovation but the innovation wasn’t simply a move to imitate something the competition already had. That’s an important point. As I mentioned yesterday, Google’s Froyo announcement at I/O seemed intent on introducing features that were picked from a shopping list of things the iPhone OS didn’t have. The things Apple is bringing to the table in the new iPhone 4G and iPhone operating system may have been spurred by the competition from Android, but they are not simply extensions of what Android already offers.

The good news is this war will have a winner; you, the consumer. Much like an earlier war between Apple and Microsoft (NASDAQ:MSFT) produced improved versions of both Windows and Mac OS, this new conflict will ultimately breed innovations and improvements in the mobile market. I, for one, can’t wait to see what happens.

Do you think this newfound competition in the mobile space will ultimately benefit the consumer? Does either Apple or Google really have the clout to truly beat the other? Leave us your thoughts in the comments section.

Image: Gizmodo

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  • Jim

    “It is a generally accepted axiom of commercial and economic theory that competition breeds innovation.”
    It is precisely not. The axiom known since the 19th century is this: competition reduces monopoly profits for innovators and encourages imitation.

  • http://www.facebook.com/kenberger Kenneth Berger

    The war is good as long as they play fair (not like Microsoft) and no one gets to far ahead and kills the competition.

    Monopoly power is bad for innovation. Simply look at MS when they had no competition. Apple's renewed success is what made MSFt get off their back ends and make a great operating system (win7), Adobe needs some competition in their space so we stop paying so much for buggy creative software.

    I love my iPhone, it has changed my life more that any other technology in a shorter period of time. I don't like Android as much from my limited and now out of date experience with the Droid. But I love the fact that Apple will have to keep up dramatic upgrades in capabilities of the iPhone OS making my iPhone better as the direct result of Google's Android feature war.

  • Lrd

    I put my money on Apple. Why?

    Here's my list:

    1) iTunes ( $1.2 billion in revenues )
    2) iPod touch ( 35 to 40 million sold )
    3) ipad ( 200k per day being sold; no viable competitor within site)
    4)iPhone ( 60 million sold )
    5) iMac ( tens of millions sold )
    6) iBook ( tens of millions sold )
    7) iPods ( 250 million sold & counting)
    8) 270+ Apple retail stores & more coming
    100 million visitors in 2009!

    Just think about how all these feed on themselves and you'll see why Apple's hard to beat.

    Only in the tech world does Google get equal billing in the hope that one company doesn't dominate the markets; but in reality; one company is clearing out in front and dominating the market.